AIR TRANSPORT
become the gateway to South-East Asia from
the rest of the world, such as North America,
Europe and the Pacific."
Beyond Asia, Vietnam Airlines flies to
Sydney and Melbourne, in Australia, and the
European cities of Amsterdam, Berlin, Moscow
(via Dubai) and Paris. It has London in its
sights as its next planned European destination.
US/VIETNAM BILATERAL
The much awaited start-up of services from
Vietnam to North America however, appears to
be a bit further off. A bilateral air-services
agreement between Hanoi and Washington is
being negotiated, but Vietnam Airlines' readi
ness to fly to the USA, and its unwillingness to
allow multiple US carriers into die country
could be a major problem.
"Our position is that we would like to have an
equitable opportunity for carriers from both
sides to serve each other, in terms of the number
of airlines, routes, destinations and capacity
control," says Vinh.
He adds: "We don't think 1996 will be a good
year to start as we're not well prepared. We
don't yet have suitable long-range aircraft —
the market is not developed to a high enough
level, and there is too much capacity and com
petition between the USA and South-East Asia.
We'll fly there in our own time."
In 1994, Vietnam Airlines reportedly will
have generated a revenue of around $250 mil
lion, but, as a state-owned entity, its full finan
cial results are not available for public scrutiny.
Vinh claims that the airline is operating in the
black, but will not give any figures other than
that its net profit represented "less than 10%"
of revenue.
Whatever Vietnam Airlines' true financial
position, it is clear that the company does not
have the financial resources required to revamp
its fleet to keep pace with projected traffic
growth. The airline stated late in 1994 that it
needed $5 billion to build up a fleet of 70-80
aircraft by the year 2005 to meet demand.
Neither privatisation nor the sale of equity to
foreign investors appear to be politically accept
able solutions to raising the necessary capital in
the near future. Some international airlines,
including Air France, have nonetheless ex
pressed interest in taking a stake.
Vietnam Airlines is instead looking for credit
from either Japan, the European Union or the
US Exim Bank to underwrite planned aircraft
acquisitions. "Vietnam Airlines is not able to
finance purchases itself. We need instead the
assistance of international financial establish
ments," says Vinh (Flight International, 4-10
October, P39).
INTERIM SOLUTIONS
The airline's immediate priority is to replace its
fleet of wet-leased Airbus Industrie A3 20s and
Boeing 767s with dry-leased aircraft. "We plan
eventually to buy some aircraft," says Vinh, but
he adds that more time is needed "...to select the
right aircraft and chose the best solution, espe
cially the financial package".
Vietnam Airlines operates eight A320s wet-
leased from Air France, General Electric Capital
and ORTX, many of which are due to be returned
in 1996. As an interim, it is planned to dry-lease
ten new-build Airbus A320s, powered by CFM56
engines, from Region Air of Singapore. The ten-
year lease deal includes a purchase option (Flight
International, 27 September-3 October, PI4).
Vietnam Airlines is also negotiating a similar
leasing deal to replace two Boeing 767-300ERs
and a single -200ER, wet-leased from Ansett
and Royal Brunei Airlines (RBA). Earlier this
year.the airline took delivery of a fourth 767-
300ER, also wet-leased from RBA.
Additional aircraft are needed if Vietnam
Airlines is to achieve its previously stated goal of
phasing out completely its fleet of antiquated
Russian airliners. At least 12 TupolevTu-134Bs
and a single Yakovlev Yak-40 remain in service,
but account for only 5% of the airline's total
capacity, says Vinh.
While Vietnam Airline has not formally
ruled out purchasing alternative types of air
craft, such as the Boeing 737 or McDonnell
Douglas MD-90s, it is likely that the carrier will
opt for more Airbus types.
Says Vinh: "We're not saying we're going to
buy the A320 or 767, but we prefer the aircraft
because we've already had more than two years
of operational experience. We also cannot
afford to have too many different aircraft types
in our fleet: we want to limit this to three or four
at the most."
Longer-term planning calls for the introduc
tion of between four and six long-range aircraft
to fly non-stop to Europe, and eventually to
open up routes to the US West Coast. The air
line has already been offered two deferred Air
France Airbus A3 40s, but no decision has yet
been taken. Other types under evaluation
include the McDonnell Douglas MD-11 and
the Boeing 777 and 747. Vinh, however, admits
that the latter is a probably too big for its needs.
Other planned acquisitions include two new
Fokker 70s, due for delivery in May and July
1996, and additional ATR 72 turboprops.
While the Fokker 70s will be used to replace
Tu-134s on certain routes, the aircraft have
Twelve Tu-134s account for only 5% of capacity
been ordered ostensibly for Government VIP
use and are not regarded by Vinh as represent
ing an additional type.
Vietnam Airlines intends instead to concen
trate on expanding its ATR 72 fleet used on
domestic and short-haul regional routes to
Cambodia and Laos. Four turboprops are
already in service, with two additional leased
aircraft to be added in early 1996, and a further
two likely to follow.
TRAINING AND SUPPORT
As part of Air France's partnership agreement
with Vietnam Airlines to provide wet-leased
A3 20s, the French airline has undertaken to
train Vietnamese pilots and technicians. Of the
32 former Tu-134 pilots selected for A320 con
version, three captains and four first officers
have so far completed training and are flying.
Converting former Tu-134 crews to operate
the fly-by-wire A3 20 has proved to be a very
difficult and time-consuming task, say Air
France sources. A major problem for pilots has
been the transition from a cockpit with five
crew in the Tu-134, including a radio operator
and navigator, to the digital two-man environ
ment of the A3 20.
With around 50 French pilots and first offi
cers now seconded to Vietnam Airlines, the car
rier will still be heavily dependent on foreign
crews after the return of Air France's wet-leased
aircraft in 1996. A new contract is therefore
being negotiated, extending Air France's sup
port to the new dry-leased A320s.
Vietnam Airlines, in the meantime, has dis
patched some 90 ah initio students to Australia
and France for training. The largest batch, con
sisting of some 60 students, is receiving instruc
tion at Hawker de Havilland's Australian
Aviation College in Adelaide, funded by
Australian Federal Government aid.
It is also sending a large number of techni
cians to Australia, France and the UK
for training in an attempt to bolster its main
tenance capability. Vietnam Airlines' two exist
ing maintenance sites, A75 in Ho Chi Minh and
A76 in Hanoi, are limited to light C-checks on
the A320 and ATR 72, with any heavier work
being placed overseas. Q
FLIGHT INTERNATIONAL 15 - 21 November 1995 31